Amazon To Restart Physical Grocery Expansion In 2024 After Yearlong Pause
Amazon is once again pressing forward with grocery delivery and brick-and-mortar stores, announcing it will open more of its Amazon Fresh locations after pausing expansion and shuttering stores earlier this year.
The pause earlier came after Tony Hoggett, who leads the grocery business for the e-commerce giant, ordered a review and revision of its fresh-food strategy, Bloomberg reported.
Amazon will redesign stores and add offerings like coffee and donuts, with an emphasis on these items instead of the tech-heavy strategy it employed in the past, according to Bloomberg.
Vacant properties left behind since the pause was announced in February have been the subject of legal trouble, including a lawsuit filed in Pennsylvania's Montgomery County Civil Court. Federal Realty Investment Trust alleged technical default on Amazon's lease of 31K SF.
Amazon filed a countersuit, claiming its landlord was at fault for failure to complete a work order that would allow the space to transition from its former use as a Barnes & Noble.
Another lawsuit popped up in New York over a lease in Long Island the retailer wanted out of, Business Insider reported in September. Other suits were filed in New Jersey and Washington.
Openings are scheduled to begin again in 2024 with five redesigned locations, three of which are in the Los Angeles area, Bloomberg reported.
“We will have a good pipeline for next year,” Amazon Fresh Worldwide Vice President Claire Peters told the publication. “What we won’t do is open stores aimlessly.”
In addition to the physical expansion, Amazon will begin allowing more people to use its Amazon Fresh grocery delivery service.
The service, formerly limited to Amazon Prime subscribers, will be available anywhere there is Amazon Fresh service.
Delivery from Whole Foods Market stores is coming to non-Prime subscribers “in the very near future,” Peters told Bloomberg.
Amazon captures roughly 3% of grocery market share, The Wall Street Journal reported in May, knocked out of the top ranks by behemoths like Walmart, Kroger and Costco. But the market is changing as competition from discount grocers and online-based ones continues to grow.